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Dividend with Election to Reinvest: Tax Treatment and Salient Dates
FAIRVEST PROPERTY HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1998/005011/06)
Share code: FVT ISIN: ZAE000203808
(Approved as a REIT by the JSE)
(“Fairvest” or “the Company”)
DIVIDEND WITH ELECTION TO REINVEST: TAX TREATMENT AND SALIENT DATE
Fairvest shareholders (“Shareholders”) are referred to Fairvest’s summarised consolidated results for
the six months ended 31 December 2018, as published on SENS today, 27 February 2019, wherein
Shareholders were advised that Fairvest’s board of directors has approved and declared an interim
gross dividend, out of income reserves, of 10.616 cents per share for the six-month period ended 31
December 2018, payable to shareholders registered as such at the close of business on Friday, 5 April
2019 (“Record Date”).
Shareholders will be entitled, in respect of all or part of their shareholdings, to elect to reinvest the
cash dividend of 10.616 cents per share, in return for Fairvest ordinary shares (“Shares”)
(“Reinvestment Alternative”), failing which they will receive the cash dividend (“Cash Dividend”).
Further details regarding the Reinvestment Alternative will be set out in a circular to Shareholders, to
be issued on 13 March 2019.
The entitlement of Shareholders to elect to participate in the Reinvestment Alternative is subject to
Fairvest’s board of directors, either itself or through a board sub-committee appointed to set the
pricing and terms of the Reinvestment Alternative, having the discretion to withdraw the entitlement
to elect the Reinvestment Alternative should market conditions warrant such action. A withdrawal of
the entitlement to elect the Reinvestment Alternative would be communicated to Shareholders
before the publication of the finalisation announcement on Friday, 22 March 2019 by 11:00.
By electing the Reinvestment Alternative, Shareholders will be able to increase their shareholding in
Fairvest without incurring dealing costs. In turn, Fairvest will benefit from an increase in the amount
of Shareholders’ funds available to support continued growth.
SALIENT DATES AND TIMES
Please see below the salient dates and times relating to the Cash Dividend and Reinvestment
Alternative:
SALIENT DATES AND TIMES 2019
Record date to determine which Shareholders are entitled to receive the circular (“Circular”) Friday, 8 March
Circular and form of election posted to Shareholders Friday, 15 March
Announcement of Reinvestment Alternative issue price, ratio and finalisation information on Friday, 22 March
SENS
Last day to trade cum Reinvestment Alternative and Cash Dividend Tuesday, 2 April
Trading commences ex Reinvestment Alternative and Cash Dividend Wednesday, 3 April
Listing of maximum possible number of Shares to be issued under the Reinvestment Friday, 5 April
Alternative
Last day to elect to receive Reinvestment Alternative by 12:00 (South African time) on Friday, 5 April
Record Date Friday, 5 April
Electronic payment and CSDP/broker accounts updated in respect of Cash Dividend Monday, 8 April
Announcement of the results of the Reinvestment Alternative and Cash Dividend on SENS Monday, 8 April
Share certificates posted and CSDP/broker accounts updated in respect of Reinvestment Wednesday, 10 April
Alternative on or about
Adjustment of number of new Shares listed on or about Friday, 12 April
Notes:
1. Shareholders electing the Reinvestment Alternative, should note that settlement of the Shares will occur 3 business
days after the Record Date, which differs from the conventional one business day after the record date settlement
process.
2. Shares may not be dematerialised or rematerialised between Wednesday, 3 April 2019 and Friday, 5 April 2019,
both days inclusive.
3. The above dates and times are subject to change. Any changes will be announced on SENS.
TAX IMPLICATIONS
In accordance with Fairvest’s status as a Real Estate Investment Trust (“REIT”), Shareholders are
advised that the dividend meets the requirements of a “qualifying distribution” for the purposes of
section 25BB of the Income Tax Act, No. 58 of 1962 (“Income Tax Act”).
Qualifying distributions received by Shareholders who are South African tax residents must be
included in the gross income of such Shareholders (as a non-exempt dividend in terms of section
10(1)(k)(aa) of the Income Tax Act), with the effect that the qualifying distribution is taxable as income
in the hands of the Shareholder. These qualifying distributions are, however, exempt from dividend
withholding tax in the hands of South African tax resident Shareholders, provided that the South
African resident Shareholders have provided the following forms to their Central Securities Depository
Participant (“CSDP”) or broker, as the case may be, in respect of uncertificated Shares, or Fairvest’s
transfer secretaries (“Transfer Secretaries”), in respect of certificated Shares:
a) a declaration that the distribution is exempt from dividends tax; and
b) a written undertaking to inform the CSDP, broker or the Transfer Secretaries, as the case may
be, should the distribution cease to be exempt from dividend withholding tax,
both in the form prescribed by the Commissioner for the South African Revenue Service (“SARS”) and
Shareholders are advised to contact their CSDP, broker or the Transfer Secretaries, as the case may
be, to arrange for the abovementioned documents to be submitted prior to payment of the
distribution, if such documents have not already been submitted.
Qualifying distributions received by non-resident Shareholders will not be taxable as income and
instead will be treated as ordinary dividends but which are exempt in terms of the usual dividend
exemptions per section 10(1)(k) of the Income Tax Act. Any qualifying distribution received by a non-
resident from a REIT will be subject to dividend withholding tax at 20%, unless the rate is reduced in
terms of any applicable agreement for the avoidance of double taxation (“DTA”) between South Africa
and the country of residence of the Shareholder. Assuming dividend withholding tax will be withheld
at a rate of 20%, the net amount due to non-resident Shareholders will be 8.4928 cents per Share. A
reduced dividend withholding tax rate in terms of the applicable DTA, may only be relied on if the non-
resident Shareholder has provided the following forms to their CSDP or broker, as the case may be, in
respect of the uncertificated Shares, or the Transfer Secretaries, in respect of certificated Shares:
a) a declaration that the dividend is subject to a reduced rate as a result of the application of a
DTA; and
b) a written undertaking to inform their CSDP, broker or the Transfer Secretaries, as the case may
be, should the circumstances affecting the reduced rate change or the beneficial owner cease
to be the beneficial owner,
both in the form prescribed by SARS. Non-resident Shareholders are advised to contact their CSDP,
broker or the Transfer Secretaries, as the case may be, to arrange for the abovementioned documents
to be submitted prior to payment of the distribution if such documents have not already been
submitted, if applicable.
Local tax resident Shareholders as well as non-resident Shareholders are encouraged to consult their
professional advisors should they be in any doubt as to the appropriate action to take.
FURTHER INFORMATION
Fractions
Trading in the electronic Strate environment does not permit fractions and fractional entitlements in
respect of shares. Accordingly, should a Shareholder’s reinvestment in new Shares, calculated in
accordance with the ratio to be announced in the finalisation announcement, give rise to a fraction of
a new Share, such fraction will be rounded down to the nearest whole number, resulting in the
allocation of whole Shares and a payment to the Shareholder in respect of the remaining cash amount
due to that Shareholder under the dividend. Certificated Shareholders whose bank account details are
not held by the Transfer Secretaries, are requested to provide such details to the Transfer Secretaries
to enable payment of the fraction due to the Shareholder in respect of the Reinvestment Alternative.
Should no details be on record, the funds will be held by the Company until such time as the details
have been provided and the cash fraction will be paid to the Shareholder upon its request.
Foreign shareholders
The distribution of the Circular and/or accompanying documents and the right to elect the
Reinvestment Alternative in jurisdictions other than South Africa may be restricted by law and a failure
to comply with any of these restrictions may constitute a violation of the securities laws of any such
jurisdictions. The Shares have not been and will not be registered for the purposes of the election
under the securities laws of the United Kingdom, European Economic Area or EEA, Canada, United
States of America, Japan or Australia and accordingly are not being offered, sold, taken up, re-sold or
delivered directly or indirectly to recipients with registered addresses in such jurisdictions.
Shares in issue at the date of declaration of the final distribution: 1 005 940 398
Fairvest income tax reference number: 9205/066/06/1
Cape Town
27 February 2019
Sponsor
PSG Capital
Date: 27/02/2019 07:16:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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